Weinstein Loses $1.4 Million on Hamptons Estate.

Disgraced producer Harvey Weinstein settled on a $10 million sale price for a Hamptons mansion he bought three years ago for $11.4 million

The hits just keep coming for publicly pilloried and legally embattled film and television super-producer Harvey Weinstein and his red carpet gown designer soon-to-be-ex-wife Georgina Chapman who took a staggering $1.4 million loss, not counting carrying costs, improvement expenses and real estate fees, on the sale of a bay front mansion in the sleepy Hamptons community of Amagansett, New York.

The May-December former couple, he’s nearly 25 years her senior, settled on a sale price of $10 million for the estate they purchased in June 2014 for $11.4 million from nine-time Tony winning Broadway producer Roy Furman (“Spamalot,” “The Book of Mormon” and the recent revival of “Hello, Dolly”). Read the rest of this entry »

It seems an incredible waste to put tens of millions, if not hundreds of millions, of taxpayer dollars at risk through fraud on federal exchanges.

On Tuesday, the Government Accountability Office (GAO) released another report into eligibility verification checks on the federally run Obamacare insurance exchange used by more than three dozen states. As with prior studies, GAO concluded that regulators still need to improve integrity efforts to ensure the federal government spends taxpayer funds wisely.

Among the report’s most noteworthy conclusions: A total of 17,000 federally subsidized insurance policies studied during the 2015 plan year—the most recent for which GAO had complete data at the time of its investigation—began or continued after the applicant’s reported date of death. In 1,000 of those cases, coverage began after the applicant’s reported date of death. In a further 2,000, the application was submitted after the applicant’s reported date of death—in most cases because the exchange automatically re-enrolled applicants without checking to determine that they remained alive.

GAO previously recommended that the federal exchange verify eligibility periodically, checking changes in circumstances that would affect the status of federal subsidies, such as death. However, to the best of auditors’ knowledge, the Centers for Medicare and Medicaid Services (CMS) has not implemented this recommendation, one of 18 relating to exchange integrity that remain open (i.e., not completed) from two prior GAO reports. Read the rest of this entry »

Many eateries are seeing their profits squeezed, or worse, as wages rise. The amount of vacant food service space in Manhattan has never been higher, according to real estate experts.

Lisa Fickenscher reports: One Big Apple steakhouse owner’s beef with the rising minimum wage got him grilled on social media on Monday.

Willie “Jack” Degel, long an outspoken critic of rising minimum wages and their effect on restaurants, talked himself into the firestorm when he inadvertently knocked both his customers and his employees during an interview on national TV.

“One could conclude that more restaurants are closing than opening.”

— James Famularo, senior director of Eastern Consolidated.

Degel, who owns Uncle Jack’s Steakhouse and starred in Food Network’s reality television show “Restaurant Stakeout,” first put his foot in his mouth when he was asked about how the rising minimum wage affects his eateries.

Degel said he can’t just pass the added cost to his customers because they are “not educated” about the economics of running a restaurant.

Degel’s Twitter feed blew up with hate tweets.

The businessman also said it was harder to keep his employees today because wait staff, like those at other restaurants, have a “sense of entitlement.”

After the comments, made on “Fox & Friends,” Degel’s Twitter feed blew up with hate tweets.

“Omg! I would never patronize a place that thinks so little of its staff,” jacottrell tweeted. “Calling your staff entitled and prefer when they were servants? Good grief man!”

“This makes me sad,” tweeted sdusn06. “We go have brunch there at least once a month Guess We will find another place.”

While Degel clearly fumbled the interview, many restaurant owners are feeling the pain of rising minimum wages.

Many eateries are seeing their profits squeezed, or worse, as wages rise.

Corporations could repatriate as much as $400 billion in earnings and cash from abroad.

Ira Iosebashvili reports: A provision of the tax overhaul is expected to release a tide of U.S. corporate cash from abroad, a development likely to jolt the dollar and reverberate throughout financial markets early next year.

Companies could bring back as much as $400 billion, according to one estimate, as they take advantage of a one-time cut for repatriation of earnings and cash held overseas written into the GOP tax overhaul. That typically requires them to sell foreign holdings and buy assets denominated in dollars, which could boost the U.S. currency.

Gauging the dollar’s trajectory is crucial to both investors and corporations. The currency’s climb over the past several years has been blamed for pressuring profits among U.S. multinational companies and making exporters’ goods less competitive abroad.

Its trajectory also influences prices for raw materials like oil, copper and gold, which are denominated in dollars and become more expensive to foreign investors when the dollar rises.

Many investors expected the dollar to strengthen in 2017, boosted by the Trump administration’s fiscal-stimulus and infrastructure-spending pledges. Instead, the currency as of Friday had fallen nearly 7% against its peers, as key White House initiatives stalled.

“ … the City’s tax, which is labeled ‘Income Tax,’ is exactly that. It cannot be restyled as an ‘excise tax’ on the … ‘privileges’ of receiving revenue in Seattle or choosing to live in Seattle.”

Opponents of Seattle’s so-called “wealth tax” immediately hailed the ruling as proof that the city long has known the tax was legally flawed, but nonetheless pushed it into law.

“The city knowingly violated several laws in imposing this tax,” said Brian T. Hodges, a senior attorney for the Pacific Legal Foundation, which represented several Seattle residents challenging the law. “This ruling is probably the worst scenario for the city and the best scenario for the opponents of the income tax.”

While Wednesday’s decision is disappointing, the city intends to appeal it directly to the State Supreme Court, where officials always expected the question to be decided, a spokeswoman for Seattle City Attorney Pete Holmes said in an email.

In a joint statement, Holmes and Seattle Mayor Tim Burgess said their goal is to eliminate the state’s overreliance on regressive sales taxes and ensure the wealthy pay their fair share.

Washington’s tax system has been called the most regressive in the country, meaning that low-income people pay a much higher percentage of their earnings than wealthier residents.

Ed Note:

“has been called”.

Really? When? Where? By whom?

This is a passive lazy gesture, using weasel words.

Passed by a unanimous City Council vote in July and subsequently signed into law by former Mayor Ed Murray, the Seattle measure would impose a 2.25 percent tax on total income above $250,000 for individuals and above $500,000 for married couples filing together. The city estimates it would raise about $140 million a year. Read the rest of this entry »

Gabriel Calzada, the executive president of Guatemala’s Universidad Francisco Marroquín talks with Reason’s Nick Gillespie about trade restrictions and the role of higher education.

President Trump’s move to raise “barriers to people, to goods, to services,” says Gabriel Calzada Alvarez, executive president of Guatemala’s Universidad Francisco Marroquín (UFM), “is a danger not just for Central America [but] for the U.S. and for the world.”

The great irony, Calzada says, is that the U.S. has benefited immensely from free trade and immigration and “now wants to raise barriers.”

Calzada sat down with Reason’s Nick Gillespie at Freedom Fest 2017 to talk about the impact of trade restrictions on Latin America, the changing role of higher education, and how students are bringing capitalism to the region.

UFM, a private, secular university in Guatemala City, teaches free market economics and emphasizes the importance of intellectual debate on campus. Read the rest of this entry »

A sobering reality has gripped Hollywood as domestic film industry revenue fell an estimated 16% during the all-important summer season.

Ryan Faughnder writes: As Hollywood wraps up the all-important summer box-office season this Labor Day weekend, a sobering reality has gripped the industry.

The number of tickets sold in the United States and Canada this summer is projected to fall to the lowest level in a quarter-century.

The results have put the squeeze on the nation’s top theater chains, whose stocks have taken a drubbing. AMC Theatres Chief Executive Adam Aron this month called his company’s most recent quarter “simply a bust.”

Such blunt language reflects some worrisome trends. Domestic box-office revenue is expected to total $3.78 billion for the first weekend of May through Labor Day — a key period that generates about 40% of domestic ticket sales — down nearly 16% from the same period last year, according to comScore. That’s an even worse decline than the 10% drop some studio executives predicted before the summer began.

And the number of actual tickets sold this summer paints a bleaker picture, with total admissions likely to clock in at about 425 million, the lowest level since 1992, according to industry estimates.

No one can fully explain why. Studio executives, movie theater operators and analysts cited the usual explanations for the summer slump. There are the obvious reasons: Too many bad movies, including sequels, reboots and aging franchises that no one wanted to see. Some point to rising ticket prices, which hit a record high in the second quarter, according to the National Assn. of Theatre Owners. Then there are long-term challenges, including competition from streaming services such as Netflix and the influence of the movie review site Rotten Tomatoes. How about all of the above?

What is clear: This summer was marred with multiple high-profile films that flopped stateside, including “The Mummy,” “Baywatch,” “The Dark Tower” and “King Arthur: Legend of the Sword.” Sequels in the “Alien,” “Transformers” and “Pirates of the Caribbean” franchises also disappointed. (International ticket sales are helping to ease some of the pain.) Read the rest of this entry »

Many years ago, in response to a colleague saying a certain appropriation was “only” a billion dollars, Senator Everitt Dirksen famously replied, “A billion here, a billion there, it adds up!” Such common sense (not to mention such dry wit by a politician) is rare in this era in which the slick industry PR people prey on widespread innumeracy in the press and Congress.

Advocates for more liberal immigration policies like to dismiss concerns about the H-1B work visa program by pointing out that the yearly H-1B cap is minuscule compared to the total labor force of the U.S. Of course, a 10-year-old could see through that argument; the visa is usable only for certain kinds of jobs, so it is absurd to compare to the total labor force.

Tech companies like to make statements like, “Only 5% of our workers are H-1Bs.” A 10-year-old might partly see through this…

In the wake of the 2008 financial crisis, big banks paid tens of billions of dollars to settle state and federal fraud investigations, yet not one top bank executive was prosecuted. Plus, the eye doctor who first uncovered possible links between erectile dysfunction drugs and permanent blindness. Also, the surprising reason why the federal government is missing-out on some of the best and brightest talent, as it recruits to fight online cyber battles.

As HBO’s blockbuster series Game of Thrones returns for its seventh season, Reason offers its own freedom-filled parody. A libertarian paradise north of the wall? What’s happened to Westeros’ social security trust fund? Should it take low-income Dothraki four years to get a hair-braiding license?

Written and produced by Austin Bragg, Meredith Bragg, and Andrew Heaton. Shot and edited by Bragg and Bragg. Starring Andrew Heaton, Austin Bragg, and Remy.

City officials stopped funding the UW team when they didn’t like the results.

Dan Springer reports: When a University of Washington study came out this week showing Seattle’s minimum wage has cost 5,000 jobs and is hurting low income workers, city leaders attacked the messenger –- a team of respected economists at Washington’s premiere public university.

The researchers, led by Jacob Vigdor, were hired by the city in 2014 to study the effects of Seattle’s $15 wage experiment. The contract called for five years of research. City officials stopped funding the UW team when they didn’t like the results.

“The moment we saw it was based on flawed methodology and was going to be unreliable, the Vigdor study no longer speaks for City Hall,” said Seattle City Councilwoman Kshama Sawant.

Reich is currently co-chair of the Institute for Research on Labor and Employment. Before earning his PhD in economics from Harvard, Reich was a founding member of the Union for Radical Political Economics (URPE), a group seeking a “human-centered radical alternative to capitalism,” according to its website.

Reich has authored several studies on the effects of raising the minimum wage. They all concluded that increasing the minimum wage only helps low-skilled workers.

As soon as Seattle politicians knew the University of Washington study found raising Seattle’s minimum wage from $11 to $13 an hour led to a 9-percent cut in hours worked and an average of $125 less earned each month, they commissioned Reich to do his own study and then criticized UW’s research.

According to emails obtained by Fox News, Reich was given a deadline by Murray. His work was to be completed just before the University of Washington team announced its results. Vigdor, the director of the study, shared with city council staffers the preliminary results of the research and provided a timeline for when it would be made public. Read the rest of this entry »

Ben Shapiro writes: Remember that time Seattle’s socialist city council member Kshama Sawant pressed for the city to increase its minimum wage to $15 per hour? I actually debated Sawant on the issue; I asked her if she would be in favor of raising the wage to $1,000 per hour. She misdirected from the issue.

Seattle actually ended up embracing $13 per hour, raising the minimum wage from $9.47 in 2014 to $11 in 2015 to $13 in 2016 under the theory that an increase wouldn’t throw people out of work, wouldn’t encourage part-time hiring, and would inflate salaries enough to allow more affordability in the Seattle housing market.

From the dustbin of history: The socialist zombies of Seattle

A new study demonstrates that, as usual, central planning of the economy leads to precisely the reverse of the results the planners seek to achieve.

Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.

In other words, restaurants didn’t fire anybody, they just put them on part-time shifts and cut back their hours. That shouldn’t be a surprise, since that’s precisely what happens every time the government places an extra burden on employers. Read the rest of this entry »

Keith J. Kelly reports: Reporters at the New York Times could soon be “vulnerable” to the ax. If the ongoing round of voluntary buyouts being offered to editing staff does not get enough takers, the Gray Lady could begin another round, NYT Executive Editor Dean Baquet recently warned his top department editors.

“Up until now, the company had not indicated that layoffs would happen if targeted numbers weren’t achieved,” Grant Glickson, president of the NewsGuild, told Media Ink.

As part of the NYT’s ongoing restructuring of its editing ranks, 109 copy editors have had their jobs eliminated. There are estimated to be about 50 new jobs available in the restructured editing operation that the Times envisions for its digital- and video-oriented future.

When the downsizing was first revealed in late May, a memo from Baquet and Managing Editor Joe Kahn portrayed the cuts as a “streamlining” of the editing process and indicated that some of the savings would be used to hire up to 100 more journalists.

But in a mid-June meeting with department heads, Baquet admitted that journalists could be targeted in a new round of layoffs once the editing ranks are culled. Read the rest of this entry »

Andrew Charles from Cowen cited plans for the restaurant chain to roll out mobile ordering across 14,000 U.S. locations by the end of 2017. The technology upgrades, part of what McDonald’s calls “Experience of the Future,” includes digital ordering kiosks that will be offered in 2,500 restaurants by the end of the year and table delivery.

“MCD is cultivating a digital platform through mobile ordering and Experience of the Future (EOTF), an in-store technological overhaul most conspicuous through kiosk ordering and table delivery,” Charles wrote in a note to clients Tuesday. “Our analysis suggests efforts should bear fruit in 2018 with a combined 130 bps [basis points] contribution to U.S. comps [comparable sales].” Read the rest of this entry »

An editor at The Nation, Leonard’s case fixes on three points. First, that millennials need stronger union power in order to attain better living standards. Second, that capitalism has failed. Third, that larger government is beneficial.

Leonard is wrong on each count.

She starts by lamenting that “…there is no left-wing party devoted to protecting the interests of the poor, the working class and the young.” Leonard blames declining union influence over political parties. Unions, she says, are the best way to empower the poor, the lower skilled, and the young.

I think not.

At a basic level, unions serve their members, not society. When, for example, a transport union shuts down commuter access to a city, it is not doing so to help commuters. It is doing so to extract wealth from those consumers, via the transport company, and redistribute that wealth to its members.

Moreover, when unions demand absolute protections for older workers, they make it near-impossible for companies to hire younger workers. As I’ve explained, there is a damning correlation between greater union power and increased youth unemployment. Read the rest of this entry »

Paul Bedard writes: In the latest sign that Washington operates in an alternate economy, journalism jobs around the country dove 22 percent in the last 10 years, but they spiked a whopping 38 percent in the nation’s capital, according to a new economic study. What’s more, salaries for Washington journalists rose 7 percent while diving nationally.

While 12,000 reporting jobs were eliminated in most markets in the last decade, the Washington journalism market expanded from 2,190 to 3,030. That is more than five journalists for every single House and Senate member.

The study reviewed rents in major cities and showed how rents have spiked while the salaries of reporters hasn’t. That gap may be responsible for the shift by reporters, even award-winning journalists, to better paying public relations.

“Our analysis illustrated that reporter salaries are growing slower than rents in most metros. Nationwide, reporter salaries declined by 7 percent over the past decade while rents increased 9 percent. If this trend continues, publications will struggle to hire and retain talent,” said the report provided to Secrets. Read the rest of this entry »

The ‘Right’ to Health Care.

There isn’t one.

Kevin D. Williamson writes: With the American Health Care Act dominating the week’s news, one conversation has been unavoidable: Someone — someone who pays attention to public policy — will suggest that we pursue policy x, y, or z, and someone else — someone who pays a little less careful attention, who probably watches a lot of cable-television entertainment masquerading as news — responds: “The first thing we have to do is acknowledge that health care is a human right!” What follows is a moment during which the second speaker visibly luxuriates in his display of empathy and virtue, which is, of course, the point of the exercise.

It’s kind of gross, but that’s where we are, politically, as a country.

Here is a thought experiment: You have four children and three apples. You would like for everyone to have his own apple. You go to Congress, and you successfully persuade the House and the Senate to endorse a joint resolution declaring that everyone has a right to an apple of his own. A ticker-tape parade is held in your honor, and you share your story with Oprah, after which you are invited to address the United Nations, which passes the International Convention on the Rights of These Four Kids in Particular to an Individual Apple Each. You are visited by the souls of Mohandas Gandhi and Mother Teresa, who beam down approvingly from a joint Hindu-Catholic cloud in Heaven.

Question: How many apples do you have?

You have three apples, dummy. Three. You have four children. Each of those children has a congressionally endorsed, U.N.-approved, saint-ratified right to an apple of his own. But here’s the thing: You have three apples and four children. Nothing has changed.

Declaring a right in a scarce good is meaningless. It is a rhetorical gesture without any application to the events and conundrums of the real world. If the Dalai Lama were to lead 10,000 bodhisattvas in meditation, and the subject of that meditation was the human right to health care, it would do less good for the cause of actually providing people with health care than the lowliest temp at Merck does before his second cup of coffee on any given Tuesday morning. Read the rest of this entry »

Today is the 116th anniversary of the birth of F. A. Hayek, one of the greatest scholars of the 20th century.

David Boaz writes: Back in 2010, as the tea party movement was on the verge of delivering an electoral rebuke to President Obama’s big-government policies, the New York Times derided the movement for reviving “long-dormant ideas [found in] once-obscure texts by dead writers.” They meant Hayek especially. But a more astute journalist might not have regarded Hayek as obscure.

Who was Hayek? He was an economist born and educated in Vienna. After the Nazi conquest of Austria, he became a British citizen and taught there and at the University of Chicago for most of his career. He was awarded the Nobel Prize in Economics in 1974. President Ronald Reagan called him one of the two or three people who had most influenced him, and so did some of the dissidents behind the Iron Curtain. President George H. W. Bush awarded him the Medal of Freedom. Margaret Thatcher banged his great book “The Constitution of Liberty” on the table at Conservative Party headquarters and declared “This is what we believe.” Milton Friedman described him as “the most important social thinker of the 20th century.”

But respect for Hayek extended far beyond libertarians and conservatives. Lawrence H. Summers, former president of Harvard and a top economic adviser to Presidents Clinton and Obama, called him the author of “the single most important thing to learn from an economics course today” — that markets mostly work without plans or direction. He is the hero of “The Commanding Heights,” the book and PBS series on the battle of economic ideas in the 20th century. His most popular book, “The Road to Serfdom,” has never gone out of print and saw its sales explode during the financial crisis and Wall Street bailouts. John Cassidy wrote in the New Yorker that “on the biggest issue of all, the vitality of capitalism, he was vindicated to such an extent that it is hardly an exaggeration to refer to the 20th century as the Hayek century.”

In much of his work Hayek explored how society can best make use of “the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.” Read the rest of this entry »

David Lieberman reports: ESPN confirmed that there’ll be a new round of layoffs today that one source says could hit about 100 of the company’s roughly 1,000 public facing on-air announcers and dot-com writers.

No one has been identified yet. These disclosures likely will trickle out once the people affected are told.

“A necessary component of managing change involves constantly evaluating how we best utilize all of our resources, and that sometimes involves difficult decisions,” ESPN President John Skipper says in a memo to staffers.

Changes in ESPN content must “go further, faster…and as always, must be efficient and nimble,” he says.

That means “we have been engaged in the challenging process of determining the talent—anchors, analysts, reporters, writers and those who handle play-by-play—necessary to meet those demands. We will implement changes in our talent lineup this week. A limited number of other positions will also be affected and a handful of new jobs will be posted to fill various needs.”

Small businesses employ over 57 million Americans. And yet, the government’s taxes and regulations overwhelmingly favor big businesses at the expense of small ones. Why? Find out in this short video.This video is part of a collaborative business and economics project with Job Creators Network and Information Station. To learn more, visit informationstation.org.

Charles Krauthammer dismissed Trump’s budget as “dead on arrival” and pointed out that entitlements are what matter, even if proposed cuts focus on domestic discretionary spending such as public broadcasting:

“This is a budget, like every other one I’ve seen in decades that I’ve been here, it is dead on arrival at Capitol Hill. Capitol Hill is a huge morgue of presidential budgets. There is not one that actually croaked into life. They all come in dead. They are wish lists. They are expressions of one’s interests, and a way to respond to promises. The beginning of this, the premise of this is defense. In the eight years under Obama, we had a real destruction of the defense budget. Obama came in, it was about 4.6 percent of GDP. When he left, it was 3.2 percent. To put it in context, under the sainted John Kennedy it was around 10 percent. We are at the lowest ebb since about Pearl Harbor, and you can see it in the readiness, so that had to be done.”

“All the real stuff, where the money is — the Willie Sutton bank money — is in entitlements, which isn’t even in here. The problem is it’s not in here because we’ve got a president who promised in the campaign, unlike just about every other Republican opponent, he wasn’t going to touch a hair on the head of entitlements. So if you don’t, it all has to come out of the domestic discretionary spending, and when you do that, you end up with these cuts which are never going to happen, and you get the old perennials. Big Bird is going to get roasted again, or at least proposed to be. I guarantee you, he will or she will — I’m not sure which it is these days — it is going to escape unscathed.”

California exports more than commodities such as movies, new technologies and produce. It also exports truck drivers, cooks and cashiers.

Every year from 2000 through 2015, more people left California than moved in from other states. This migration was not spread evenly across all income groups, a Sacramento Bee review of U.S. Census Bureau data found. The people leaving tend to be relatively poor, and many lack college degrees. Move higher up the income spectrum, and slightly more people are coming than going.

About 2.5 million people living close to the official poverty line left California for other states from 2005 through 2015, while 1.7 million people at that income level moved in from other states – for a net loss of 800,000. During the same period, the state experienced a net gain of about 20,000 residents earning at least five times the poverty rate – or $100,000 for a family of three.

Kiril Kundurazieff, 56, is among the low-income residents who left California. He spent more than a decade working in a small bookstore, then at Target, then at a Verizon call center, in Southern California. After some medical issues that hampered his eyesight, he found himself unemployed in Santa Ana, with monthly rent of about $1,000 in 2012.

“There was really nothing left for me in California,” said Kundurazieff, who also writes a blog about his cats. “The cost of living was high. The rent was high. The job market was debatable.”

Friends in Texas suggested he relocate. He now works at a Walmart in Houston, making a little north of $10 an hour. He works 40 hours a week, riding his bike about 7 miles to work many days. He does not pay state income tax. His rent is just over $500, with utilities.

About the same time that Kundurazieff was leaving, Tamara and Kit Keane were arriving from Oklahoma. Both had been working on their doctorate degrees at Oklahoma universities, Kit in biology and Tamara in education.

The Keanes already knew California. Kit, 34, was born and raised in Sacramento. Tamara, 31, spent most of her life in Southern California. They met at UC Davis about a decade ago.

With graduate degrees, they had options. They liked the cost of living in Oklahoma and bought a two-bedroom house with a backyard for the bargain basement cost of $121,000.

But they wanted to come back to California, for its beauty and to be near family. “We knew coming here, we would have to make a lot more money to live a similar lifestyle,” Tamara Keane said.

After moving back last year, both now work for the Twin Rivers Unified School District as teachers on special assignment. They are expecting a child and recently purchased a three-bedroom house in Hollywood Park for $360,000. Tamara is still working on her Ph.D.; Kit is looking into eventually teaching at the university level. “Teacher salaries are not great,” Tamara Keane said. “But they are enough for us to want to come here.”

Well-paid new arrivals in California enjoy a life that is far out of reach of much of the state’s population. Besides Hawaii and New York, California has the highest cost of living in America. Read the rest of this entry »

The U.S. stands to lose 80 million jobs to automation.

Thomas Phippen reports: The robotic labor revolution is coming quickly, and the workforce may not be able to adapt without long periods of unemployment, according to economists at the Bank of England.

“Economists should seriously consider the possibility that millions of people may be at risk of unemployment, should these technologies be widely adopted.”

“Economists should seriously consider the possibility that millions of people may be at risk of unemployment, should these technologies be widely adopted,” BOE economists Mauricio Armellini and Tim Pike wrote in a post on Bank Underground, a blog for bank employees, Wednesday.

Paying ransom just invites the next attack.

Tim Johnson reports: U.S. corporations that have long resisted bending to the demands of computer hackers who take their networks hostage are increasingly stockpiling bitcoin, the digital currency, so that they can quickly meet ransom demands rather than lose valuable corporate data.

The companies are responding to cybersecurity experts who recently have changed their advice on how to deal with the growing problem of extortionists taking control of the computers.

“It’s a moral dilemma. If you pay, you are helping the bad guys,” said Paula Long, chief executive of DataGravity, a Nashua, New Hampshire, company that helps clients secure corporate data. But, she added, “You can’t go to the moral high ground and put your company at risk.”

“A lot of companies are doing that as part of their incident response planning,” said Chris Pogue, chief information security officer at Nuix, a company that provides information management technologies. “They are setting up bitcoin wallets.”

Pogue said he believed thousands of U.S. companies had prepared strategies for dealing with hacker extortion demands, and numerous law firms have stepped in to facilitate negotiations with hackers, many of whom operate from the other side of the globe.

Symantec, a Mountain View, California, company that makes security and storage software, estimates that ransom demands to companies average between $10,000 and $75,000 for hackers to provide keys to decrypt frozen networks. Individuals whose computers get hit pay as little as $100 to $300 to unlock their encrypted files.

Companies that analyze cyber threats say the use of ransomware has exploded, and payments have soared. Recorded Future, a Somerville, Massachusetts, threat intelligence firm, says ransom payments skyrocketed 4,000 percent last year, reaching $1 billion. Another firm, Kaspersky Lab, estimates that a new business is attacked with ransomware every 40 seconds.

“If you’re hit by ransomware today, you have only two options: You either pay the criminals or you lose your data,” said Raj Samani, chief technical officer at Intel Security for Europe, the Middle East and Africa. “We underestimated the scale of the issue.”

Hackers often send out email with tainted hyperlinks to broad targets, say, an entire company. All it takes is one computer user in a company to click on the infected link to allow hackers to get a foothold in the broader network, leading to hostile encryption.

Kentucky senator explains controversial proposed legislation that would subject Federal Reserve‘s monetary policy powers to outside scrutiny as it gets new life under a new administration – and may stand its best chance at becoming law.

Prime Minister Shinzo Abe intends to propose during a meeting with U.S. President Donald Trump on Feb. 10 a bilateral economic cooperation plan, including the creation of a $450 billion (¥51 trillion) market through railways and other infrastructure investments in the United States to generate 700,000 jobs, The Yomiuri Shimbun has learned.

Trump has recently been stepping up criticism against the Japanese car market and the depreciation of the yen. Given the circumstances, Abe plans to emphasize during the upcoming talks that the bilateral cooperation will be of great advantage to the U.S. economy.

A draft for the Japan-U.S. economic cooperation plan sets forth bilateral cooperation in five fields as the “Japan-U.S. growth and employment initiative.” The five fields are: development of the world’s most advanced infrastructure in the United States; drawing on demand for infrastructure around the world; research and development of robots and artificial intelligence; collaboration in new areas such as cyber and space; and cooperation in employment and defense.

The envisioned infrastructure development in the United States includes high-speed railway projects in the northeastern part of the country, and in Texas and California, to which Japan would provide technical cooperation and extend low-interest loans. Japan would also help replace as many as 3,000 train cars currently in use on railways and subways with new models over the next 10 years.

Japan would further cooperate in highly efficient gas-fired power generation and the latest compact nuclear power generation systems.

In the research and development field, the draft calls for cooperation between Japan, which has the edge in robot technology, and the United States, which leads the world in AI technology.

Japan and the United States will jointly develop robots to be used for inspecting aging infrastructure, decommissioning nuclear power plants, and carrying out medical diagnosis and surgery.

Ashu Gargwrites:Well, it happened. I thought it was a joke when he started campaigning, and I was aghast when he was elected, but that’s all history at this point: Donald Trump is president. Rather than spend time on sour grapes, I think it’s more productive to make a clear-eyed appraisal of what his administration might mean for my industry. I know that what I say next risks being taken out of context, but from my vantage as a longtime tech entrepreneur and venture capitalist, I believe that there’s a real chance Trump will be — I’m begging you to read till the end and not take me out of context — good for startups.

“The most significant reason Trump might be good for early-stage companies is that he is very anti-regulation.”

First off, change in general is good for entrepreneurs, because it creates new circumstances for them to exploit or gaps for them to fill. Regulatory change, more specifically, is ripe with opportunity. Moreover, Trump has historically made a lot of pro-small-business noises, and has signaled that he will shake up the Small Business Administration.

Professional-wrestling magnate Linda McMahon is potentially taking over, and may be receptive to the type of changes that would allow emerging enterprises — in tech and outside it — to grow, including making it easier for first-time entrepreneurs to access startup grant funding.

“Trump has promised to make huge investments in infrastructure, largely to be funded by debt — for entrepreneurs, this will create enormous possibility.”

The most significant reason Trump might be good for early-stage companies is that he is very anti-regulation. The White House has already issued a freeze on new or pending regulations to all executive departments and agencies, for example. One can argue whether less regulation is good or bad for society. But it’s only good news for startups, which are always in a hurry to ship their ideas into the real world. Read the rest of this entry »

Legacy:Barack Obama came into the White House in 2009 promising a “new era of responsibility.” What he’s left President Trump is a government careening toward fiscal ruin.That’s what the latest report from the Congressional Budget Office shows.

The CBO report looks at what federal spending and revenues will look like over the next decade if the government is left on autopilot. The picture is grim.

Deficits this year are expected to be $559 billion. By 2023, the government will once again be running trillion-dollar annual deficits that will quickly climb in the following years.

Left unchanged, the national debt will worsen by an additional $10 trillion in a decade, equaling almost 90% of the economy.

And that’s despite the fact that, thanks to Obama’s multiple tax increases, revenues are on track to consume more than 18% of the nation’s economy, which is a full percentage point above the average since 1967.

Spending, however, is completely out of control. It’s set to climb from 20.5% of GDP next year to 23.4% by 2027. The post-1967 average was 20%.

ObamaCare subsidies alone will, according to the CBO, climb 22% this year and 20% the next — thanks to the massive increase in premiums. This cost explosion is in addition to the vast increase in Medicaid spending ObamaCare already generated. And it’s all on top of fast-growing Social Security and Medicare, both of which are rapidly headed toward insolvency.

Perhaps the biggest driver of future deficits, however, is the incredibly sluggish economy the CBO expects current economic policies to produce. Read the rest of this entry »